Arizona Commerical Spaces by Market

INDUSTRIAL

OFFICE

RETAIL

SITE SELECTION

New Tucson Opportunity Zones May Spur Growth

Tax credits for economic development in Tucson Opportunity Zones can put commercial construction into overdrive.

Tucson commercial real estate development can go into overdrive in the next few years, thanks to a federal tax credit for long-term investors that’s aimed at bringing money into low-income communities.

Twenty-seven census tracts in Pima County have been approved as Opportunity Zones. They allow investors to reduce the amount of their reinvested taxable capital gains by 10% or 15%, depending on the length of the investment.

Investors would put capital gains money into Opportunity Funds in order to qualify for the tax credit. These funds must be organized as a corporation or partnership and approved by the federal government.

Opportunity Fund monies are used as equity investments in businesses, real estate and business assets within Opportunity Zones.

Tucson Opportunity Zones

Most of the Tucson-area Opportunity Zones, which are so designated for 10 years, straddle Interstates 10 and 19 from the southern to northern ends of the city of Tucson.

They include Pima County’s 50-square-mile Sonoran Corridor mixed-used development area and the Bridges development where the University of Arizona Tech Park is beginning development.

These planned-development areas have large parcels of land for office, retail and industrial uses. Pima County and other economic development officials strategically planned on getting these big job-generating projects named as Tucson Opportunity Zones.

“Pima County and the city of Tucson…worked closely together to coordinate their applications to maximize the chance of approval and ensure the greatest economic impact for the region,” according to information on the Pima County website.

Other Tucson Opportunity Zones include

downtown

most of South Tucson

west of the University of Arizona

south of Grant Boulevard between Silverbell Road and Sixth Avenue

the Pascua Yaqui reservation and the San Xavier District of the Tohono O’odham nation

southeast of I-10 and Ina Road

Grant Road corridor between Tucson Boulevard and Swan Road

south of the Tanque Verde and Grant roads intersection

southeast of Kolb Road and 22nd Street

south of Kino Sports Complex.

“The targeted census tracts are areas that have excellent available workforce that will directly benefit from investment and improved availability of higher paying jobs,” says the Pima County website, “so this program is a win for the community, our workforce and those who invest to make us better.”

Fight against Poverty

The 2017 Tax Cuts and Jobs Act included the Opportunity Zone program as a way to boost private investment in low-income areas.

Each state was allowed to nominate census tracts that met criteria that include a low-income population. Arizona Gov. Doug Ducey solicited nominations from every county.

John Lettieri is the co-founder and president of the research and advocacy organization Economic Innovation Group that helped design the program. He has told U.S. lawmakers that the program has “the potential to drive billions of dollars in new private investment to struggling communities over the coming decade.

“The unique structure—and equity focus—of this incentive has the potential to unlock an entirely new category of investors and create an important new asset class of investments.”

This is particularly important for Tucson and the rest of Arizona, both of which struggle to find major business investors, including venture capital for the growing segment of technology startups.

Next Steps

What I and other economic development advocates like about the program is that it is another incentive to draw site selectors to Tucson as they search for areas to build new operations, relocations and expansions.

This can only enhance the types of state, regional and local incentives that have recently made Tucson home to a new Amazon fulfillment center, an expanded GEICO regional corporate office, the expansion of Raytheon and the World View headquarters.

In my 25-plus years as a commercial real estate tenant representative, I’ve picked up a wealth of information and expertise. I’m passionate about making sure that corporate users, tenants and buyers like you get a fair deal and the best solution for your business’s bottom line.COMMERCIAL REAL ESTATE GROUP OF TUCSON specializes in representing tenants and corporate users across the United States, Latin America, Europe and Asia.
For more information, call 520-299-3400.

WHAT OUR CLIENTS ARE SAYING

"On behalf of Express Employment Professionals of Tucson, I would like to thank you for the exceptional results we’ve achieved in connection to our relocation to the Airport Business Plaza in Tucson..."